Creating a Business - Term Paper Example

Where capital sourcing is not a problem, the biggest challenge is coming up with a business idea. New business ideas can be generated from one’s previous work or industry experience, hobby or interest, or from an evident opportunity that comes out of an existing need or demand of a potential market. The type of business may either be service oriented, manufacturing, or retailing. Another decision to consider is the form of organization, whether to operate as a single owner, or as a partnership or a corporation.

It is important to consider one’s personal strength or weaknesses in determining which type of business to undertake for greater success (www.prenhall.com). Finally, there is the challenge of putting everything into a written business plan, which serves as the business road map. The business plan contains the description of the proposed business, industry analysis (including SWOT analysis), mission and vision statement, product development (goods or services), proposed location of the business, management plan, marketing plan (target market, niche or mainstream, pricing and distribution), financial plan, and the scope of operation (local, national, or global) (www.prenhall.com).

A “niche” product is a specialized good or service that is produced or offered to satisfy the special demand or need of a smaller segment targeted market of an existing or mainstream market. It is narrow in focus and is “designed to appeal to a subset of the mainstream” (www.homebiz-direct.com) Within a stable economic condition, good management and marketing strategies, a niche company may have an advantage in a market because there are few market players less competitors. A niche company’s specialization in a niche product or service is in the best position to address increasing customer satisfaction level in that niche.

Another advantage is that a niche company can dictate the price of the niche commodity. However, price would only be an